Interest only mortgage

[dojo]

Currently on a repayment mortgage.

I was looking at the numbers and worked out that with an interest only mortgage I would save a hefty amount i could save this and then at the end of the year make an 'overpayment' and I would be paying off a lot more off the mortgage than I do via the repayment method.

Someone told me that to get an interest only mortgage you have to have 50% equity in the house but looking online on the price comparisons sites it seemed they were been offered at 20%...

We took out a 90% mortgage but we have repaid a bit and then value has increased so on a remortgage might hit 20%

Any advice??

[dojo]

Thanks for the replies.

My thinking (and I am new to this so bear with me)

On my mortgage (just under 5%) in the first year I only pay off 5-6k

Whereas an interest only (seem to be about 2.75%) would see me save 1k a month and therefore pay off an extra 6-7k in the first year...

Maybe I'm totally wrong.

[dojo]

OK - thanks for the replies.

Guess its a no for now and thinking about it I wouldn't be eligible for the low rate interest only mortgage and I'd end up with the same 4.7% interest rate I'm on now.

Guess the plan is to save and overpay where we can and try to get more equity to get a better rate when we finish our term.